Arb. Appeal No. 289/2025 vs Kaushalya Devi (Deceased) Through Her … on 1 April, 2026

Himachal Pradesh High Court

Arb. Appeal No. 289/2025 vs Kaushalya Devi (Deceased) Through Her … on 1 April, 2026

    2026:HHC:11549

    IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA

                                                Arb. Appeal No. 289/2025
                                                Decided on: 01.04.2026


    National Highway Authority of India                           .....Appellant




                                                                        .

                                Versus

    Kaushalya Devi (deceased) through her LR       ....Respondent





    ______________________________________________________________

    Coram:




                                                of
    The Hon'ble Mr. Justice Romesh Verma, Judge.

    Whether approved for reporting?1

    For the Appellant:
                        rt      Ms. Shreya Chauhan, Advocate.

    For the Respondent:         Mr. Yuyutsu Singh Thakur, Advocate.


    Romesh Verma, Judge (oral)

The present appeal under Section 37 of the

Arbitration and Conciliation Act, 1996 (for brevity, “Act of

1996”) arises out of the judgment dated 4.9.2023, as passed by

the learned District Judge, Bilaspur, H.P. in Arbitration

Petition No. 56/2018, whereby application filed by the

appellant/National Highway Authority of India, under Section

34 of the Act of 1996 was dismissed and the award as passed

by the Arbitrator was upheld and the respondent/land owner

1Whether reporters of the local papers may be allowed to see the judgment? Yes.

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was also held entitled to get 12% interest per annum on the

enhanced amount of the market value of the land from the

date of the publication of notification under Section 3-A of the

National Highways Act, 1956 (for brevity, “Act of 1956”) till the

.

award of the competent authority or till the date of taking

possession of the land whichever is earlier, over and apart of

30% solatium and 9% interest per annum awarded by the

Arbitrator.

of
2 Brief facts of the case are that the land of the

respondent was acquired by the appellant in Mohal Palthin,
rt
Tehsil Ghumarwin for the expansion of National Highway No.21

(four-laning). Notification under Section 3A(1) of the Act of 1956

was published in the official gazette on 21.4.2012 and

17.8.2012 for acquiring the land of the land owners for the

aforesaid purpose. Notification under Section 3D(1) of the Act

of 1956 was issued by the appellant on 15.12.2012, 8.1.2013

and 15.3.2013. Notification under Section 3G(3) of the Act of

1956 inviting claims from the interested persons was

published in the newspaper on 1.4.2013. The competent

authority passed an award on 5.8.2013, whereby market value

of the land in question was assessed at Rs.18,00,000/- per

bigha irrespective of the classification and nature of the land in

village Palthin.

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3 Feeling dissatisfied by the award, the respondent

filed claim petition for enhancement of amount of

compensation under Section 3G(5) of the Act before the

Arbitrator, which came to be allowed vide award dated

.

5.9.2017, whereby market value of the acquired land was

enhanced from Rs.18,00,000/- to Rs.21,21,000/- per bigha

and the respondent was held entitled to 30% solatium on the

entire compensation amount and 9% interest on the enhanced

of
amount payable from the date of taking possession till the

deposit of the compensation.

4

rt
The appellant feeling aggrieved by the award, dated

5.9.2017 preferred an application under Section 34 of the Act of

1996 before the learned District Judge, Bilaspur on

16.12.2017, who vide order dated 4.9.2023 dismissed the

application filed by the appellant, whereby after upholding the

award as passed by the Arbitrator, the respondent was held

entitled to get 12% interest per annum on the enhanced

amount of the market value of the land from the date of the

publication of notification under Section 3-A of Act of 1956 till

the award of the competent authority or till the date of taking

possession of the land whichever is earlier, over and apart of

30% solatium and 9% interest per annum awarded by the

Arbitrator.

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5 By taking recourse to provisions of Section 37 of the

Act of 1996, the appellant has now preferred the instant appeal

challenging the order, dated 4.9.2023, as passed by the learned

.

District Judge.

6 It is contended by Ms. Shreya Chauhan, learned

counsel appearing of the appellant-NHAI, that impugned order

is erroneous, perverse and liable to be quashed and set aside.

of
She has submitted that the learned District Judge has not

decided controversy in hand strictly in accordance with the Act

of 1996, therefore, the impugned order is liable to be quashed
rt
and set aside. Primarily, as urged by learned counsel for the

appellant, the impugned order as passed by the learned District

Judge has been challenged on the following counts :-

(i) reliance as placed by the learned District Judge as

also the Arbitrator on sale deed, Ext. PW2/B dated

16.01.2012, registered on 1.2.2012 pertaining to

Mohal Palthin is of a very small area i.e. 1 biswa, as

compared to large tract of land acquired under the

questioned land acquisition process and thus, the

aforesaid sale deed could not have been relied upon for

assessing market value of the large tract of the land;

(ii) the Arbitrator as well as District Judge ought to

have allowed deduction to the extent of 75% towards

development; and

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(iii) Lastly, her contention is that the award of 12%

interest per annum on the enhanced amount of the

market value of the land under Section 23 (1-A) of the

Land Acquisition Act by the learned District Judge is

.

erroneous and against mandate of the Hon’ble

Supreme Court.

7 On the other hand, Mr. Yuyutsu Singh Thakur,

learned counsel appearing for the respondent, has defended the

of
impugned order and has submitted that no interference of any

kind is required in the present appeal.

8

rt
I have heard the learned counsel for the parties and

have also gone through the case file.

9 Before coming to factual matrix of the case, this

Court shall delve into scope of interference while dealing with

appeal filed under Section 37 of the Act of 1996.

10 In M/s C & C Constructions Ltd. Vs. IRCON

International Ltd, 2025 INSC 138, the Hon’ble Supreme

Court has held as under:-

“27. As far as scope of interference in an appeal
under Section 37 of Arbitration Act is concerned, the law is
well settled. In the case of Larsen Air Conditioning and
Refrigeration Company v. Union of India and Ors. in
paragraph 15, this court held thus:

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“15. The limited and extremely circumscribed jurisdiction
of the court under Section 34 of the Act, permits the court
to interfere with an award, sans the grounds of patent
illegality i.e. that “illegality must go to the root of the
matter and cannot be of a trivial nature”; and that the
Tribunal “must decide in accordance with the terms of the

.

contract, but if an arbitrator construes a term of the

contract in a reasonable manner, it will not mean that the
award can be set aside on this ground” [ref : Associate

Builders [Associate Builders v. DDA, (2015) 3 SCC 49 :
(2015) 2 SCC (Civ) 204] , SCC p. 81, para 42]. The other
ground would be denial of natural justice. In

of
appeal, Section 37 of the Act grants narrower scope to the
appellate court to review the findings in an award, if it
has been upheld, or substantially upheld under Section

34.”

rt (emphasis added)

28. In the case of Konkan Railway Corporation Limited v.

Chenab Bridge Project Undertaking in paragraph 18, this
court held thus:

“18. At the outset, we may state that the jurisdiction of the
court under Section 37 of the Act, as clarified by this Court
in MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd.,

(2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293] , is akin to the

jurisdiction of the court under Section 34 of the Act. [Id,
SCC p. 167, para 14:

“14. As far as interference with an order made

under Section 34, as per Section 37, is concerned, it
cannot be disputed that such interference under Section
37 cannot travel beyond the restrictions laid down
under Section 34. In other words, the court cannot
undertake an independent assessment of the merits of the
award, and must only ascertain that the exercise of power
by the court under Section 34 has not exceeded the scope
of the provision.”] Scope of interference by a court in an

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appeal under Section 37 of the Act, in examining an order,
setting aside or refusing to set aside an award, is
restricted and subject to the same grounds as the
challenge under Section 34 of the Act.”

29. Considering the limited scope of interference, as laid

.

down by this Court, we find absolutely no merit in the

appeal and the same is accordingly dismissed.”

11 The Hon’ble Supreme Court in Som Dutt Builders

vs. NHAI 2025 INSC 113 has held as follows:

of
“36. In MMTC Ltd. Vs. Vedanta Ltd., this Court held that as
far as Section 34 is concerned, the position is well settled
that the court does not sit in appeal over an arbitral award
and may interfere on merits only on the limited ground
rt
provided under Section 34(2)(b)(ii) i.e. if the award is against
the public policy of India. Even then, the interference would

not entail a review on the merits of the dispute but would be
limited to situations where the findings of the arbitrator are
arbitrary, capricious or perverse or when the conscience of

the court is shocked or when the illegality is not trivial but
goes to the root of the matter. An arbitral award may not be
interfered with if the view taken by the arbitrator is a

possible view based on facts. As far as interference with an
order made under Section 34 by the court under Section 37

is concerned, it has been held that such interference under
Section 37 cannot travel beyond the restrictions laid down

under Section 34. In other words, the court cannot undertake
an independent assessment of the merits of the award and
must only ascertain that the exercise of power by the court
under Section 34 has not exceeded the scope of the
provision.

37. What is public policy of India has been explained in
Ssangyong Engineer and Construction Company Ltd.

(supra). It means the fundamental policy of Indian law.

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Violation of Indian statutes linked to public policy or public
interest and disregarding orders of superior courts in India
would be regarded as being contrary to the fundamental
policy of Indian law. It would also mean that the arbitral
award is against basic notions of justice or morality. An
arbitral award can be set aside on the ground of patent

.

illegality i.e. where the illegality goes to the root of the matter
but re-appreciation of evidence cannot be permitted under
the ground of patent illegality.

38. xxx xxx xxx

39. In Reliance Infrastructure Ltd. (supra), this Court
referring to one of its earlier decisions in UHL Power

of
Company Ltd. Vs. State of Himachal Pradesh14, held that
scope of interference under Section 37 is all the more
circumscribed
rt keeping in view the limited scope of
interference with an arbitral award under Section 34 of the
1996 Act. As it is, the jurisdiction conferred on courts under

Section 34 of the 1996 Act is fairly narrow. Therefore, when
it comes to scope of an appeal under Section 37 of the 1996
Act, jurisdiction of the appellate court in examining an order
passed under Section 34, either setting aside or refusing to

set aside an arbitral award, is all the more circumscribed.

40. Again in M/s Larsen Air Conditioning and Refrigeration

Company (supra), this Court reiterated the position that
Section 37 of the 1996 Act grants narrower scope to the

appellate court to review the findings in an arbitral award if
it has been upheld or substantially upheld under Section

34.”

12 In A.C. Chokshi Share Broker Private Limited vs.

Jatin Pratap Desai, 2025 INSC 174, the Hon’ble Supreme

Court has observed as under:

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“22. Whether the arbitral award ought to have been set
aside: The limited supervisory role of courts while
reviewing an arbitral award is stipulated in Section 34 of
the Act, beyond whose grounds courts cannot intervene
and cannot correct errors in the arbitral award. 26 The

.

appellate jurisdiction under Section 37 is also limited, as it

is constrained by the grounds specified in Section 34 and
the court cannot undertake an independent assessment of
the merits of the award by re-appreciating evidence or

interfering with a reasonable interpretation of contractual
terms by the arbitral tribunal. 27 The court under Section

of
37 must only determine whether the Section 34 court has
exercised its jurisdiction properly and rightly, without
exceeding its scope.

rt
23-26 xxx xxx xxx

27. Applying the test for perversity under Section 34 as
explained above, it is clear that the High Court, while
exercising jurisdiction under Section 37, adopted an

incorrect approach. The arbitral tribunal’s findings are
definitely based on evidence, as has been rightly held by
the Section 34 court. The High Court, at the stage of the

Section 37 appeal, took an alternative view on this finding
of fact by reappreciating evidence. The arbitral tribunal’s

conclusion was based on oral and documentary evidence
regarding the conduct of the parties, which leads to a

reasonable and possible view that there is joint and
several liability. Hence, the High Court, while exercising
jurisdiction under Section 37, has incorrectly held the
award to be perverse.”

13 The judgments, relevant portion whereof have been

quoted hereinabove, hold that jurisdiction of the Courts under

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Section 37 of the Act of 1996 is akin to that under Section 34 of

the Act of 1996. The Courts ought not to interfere with the

arbitral award in a casual manner. The mere possibility of an

alternative view on facts or interpretation of the contract does

.

not entitle courts to reverse the findings of the Arbitral

Tribunal. Further, it has been held that the supervisory role of

Courts is very restricted in dealing with appeals under Section

37 of the Act of 1996. Scope of interference in a petition under

of
Section 34 of the Act of 1996 is narrower. Therefore, in view of

the law as laid down by the Hon’ble Supreme Court, the
rt
present case has to be decided taking into consideration the

factual background of the case in hand.

14 As regards first submission of the learned counsel for

the appellant that the sale deed, Ext. PW2/B dated 16.1.2012

could not have been made basis for assessing market value of

the large tract of the land, the Hon’ble Supreme Court in Spl.

Land Acquisition Officer & Anr. vs. M.K. Rafiq Saheb,

2011 (7) SCC 714 has categorically held that there is no

absolute bar that sale instances of smaller chunks of land

cannot be considered when a large tract of land is acquired.

Such sale deeds pertaining to smaller pieces of land can be put

to use for determining the value of acquired land which is

comparatively large in area. It has been further held that it is

hardly possible for a claimant to produce sale instances of large

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tracts of land as they are generally very far and few and

normally the sale instances would relate to small pieces of land.

Relevant portion of the judgment reads as under:

“19. The judgment of the High Court is well reasoned and

.

well considered. We find no perversity in its reasoning. The

only issue is that Ex. P-5, which was relied upon by the
High Court, relates to a small piece of land, whereas the

acquisition is of a larger piece of land. It is not an absolute
rule that when the acquired land is a large tract of land,
sale instances relating to smaller pieces of land cannot be

of
considered. There are certain circumstances when sale
deeds of small pieces of land can be used to determine the
value of acquired land which is comparatively large in area,
rt
as can be seen from the judicial pronouncements mentioned
hereunder.

20. It has been held in the case of Land Acquisition
Officer, Kammarapally Village, Nizamabad District, Andhra
Pradesh v. Nookala Rajamallu and Ors. that:-

“6. Where large area is the subject-matter of acquisition,
rate at which small plots are sold cannot be said to be a
safe criterion. Reference in this context may be made to

few decisions of this Court in Collector of Lakhimour v.
Bhuban Chandra Dutta, Prithvi Raj Taneja v. State of

M.P. and Kausalya Devi Bogra v. Land Acquisition
Officer .

7. It cannot, however, be laid down as an absolute

proposition that the rates fixed for the small plots cannot
be the basis for fixation of the rate. For example, where
there is no other material, it may in appropriate cases be
open to the adjudicating Court to make comparison of the
prices paid for small plots of land. However, in such
cases necessary deductions/adjustments have to be
made while determining the prices.”

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21. In the case of Bhagwathula Samanna and Ors. v.
Special Tahsildar and Land Acquisition Officer, it was held:

“13. The proposition that large area of land cannot possibly
fetch a price at the same rate at which small plots are sold
is not absolute proposition and in given circumstances it

.

would be permissible to take into account the price fetched

by the small plots of land. If the larger tract of land because
of advantageous position is capable of being used for the
purpose for which the smaller plots are used and is also

situated in a developed area with little or no requirement of
further development, the principle of deduction of the value

of
for purpose of comparison is not warranted.”

22. In Land Acquisition Officer, Revenue Divisional
Officer, Chittoor v. Smt. L. Kamalamma (dead) by Lrs. and
rt
others, this Court held as under:-

“6. …when no sales of comparable land was available

where large chunks of land had been sold, even land
transactions in respect of smaller extent of land could be
taken note of as indicating the price that it may fetch in
respect of large tracts of land by making appropriate

deductions such as for development of the land by
providing enough space for roads, sewers, drains,
expenses involved in formation of a lay out, lump sum

payment as also the waiting period required for selling

the sites that would be formed.”

23. Further, it has also been held in the case of Smt.
Basavva and Ors. v. Special Land Acquisition Officer and

Ors., that the court has to consider whether sales relating
to smaller pieces of land are genuine and reliable and
whether they are in respect of comparable lands. In case
the said requirements are met, sufficient deduction should
be made to arrive at a just and fair market value of large
tracts of land. Further, the court stated that the time lag for
real development and the waiting period for development

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were also relevant factors to be considered in determining
compensation. The court added that each case depended
upon its own facts. In the said case, based on the
particular facts and circumstances, this court made a total
deduction of 65% in determination of compensation.

.

24. It may also be noticed that in the normal course of

events, it is hardly possible for a claimant to produce sale
instances of large tracts of land. The sale of land containing

large tracts are generally very far and few. Normally, the
sale instances would relate to small pieces of land. This
limitation of sale transaction cannot operate to the

of
disadvantage of the claimants. Thus, the Court should look
into sale instances of smaller pieces of land while applying
reasonable element of deduction.”

rt
15 Considering the law as laid down by the Hon’ble

Apex Court and in view of the execution of the sale deed, Ext.

PW2/B, it has been duly proved by the claimant that there is

no error in the findings as rendered by the Arbitrator as well as

learned District Judge. The sale deed has been duly proved on

record as Ext. PW2/B, dated 16.1.2012, which has been

registered prior to notification having been issued under

Section 3A of the Act of 1956 i.e. on 17.8.2012.

16 The Courts below have rightly relied upon the said

sale deed for the purpose of determining compensation, which

cannot be faulted in the instant case.

17 Now coming to the second contention of the learned

counsel for the appellant that the learned District Judge should

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have allowed deduction to the extent of 75% towards

development charges, admittedly in the present case, land in

question has been acquired for widening of NH-21, thus, in

this background, suffice it to refer to one of the judgments of

.

the Hon’ble Supreme Court, in C. R. Nagaraja Shetty (2) vs.

Spl. Land Acquisition Officer and Estate Officer & Anr.,

2009 (11) SCC 75, wherein it was held as under:-

“12. That leaves us with the other question of deduction

of
ordered by the High Court. The High Court has directed the
deduction of Rs.25/- per square feet. Unfortunately, the
High Court has not discussed the reason for this deduction
rt
of Rs.25/- per square feet nor has the High Court relied on
any piece of evidence for that purpose.

13. It is true that where the lands are acquired for
public purpose like setting up of industries or setting up of
housing colonies or other such allied purposes, the

acquiring body would be entitled to deduct some amount
from the payable compensation on account of development
charges, however, it has to be established by positive

evidence that such development charges are justified. The
evidence must come for the need of development

contemplated and the possible expenditure for such
development. We do not find any such discussion in the

order of the High Court.

14. As if this is not sufficient, when we see the
judgment of the Principal Civil Judge (Sr. Division),
Bangalore, Rural District, Bangalore in Reference
proceedings, we find that there is no deduction ordered for
the so-called development charges. We are, therefore, not in
a position to understand as to from where such
development charges sprang up.

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15. The Learned Counsel appearing on behalf of the
respondents was also unable to point out any such
evidence regarding the proposed development. We cannot
ignore the fact that the land is acquired only for widening of
the National Highway. There would, therefore, be no

.

question of any such development or any costs therefor.

16. In Nelson Fernandes and Others Vs. Special Land
Acquisition Officer, South Goa & Ors, this Court has
discussed the question of development charges. That was a

case, where, the acquisition was for laying a Railway line.
This Court found that the land under acquisition was

of
situated in an area, which was adjacent to the land
already acquired for the same purpose, i.e., for laying
Railway line. In paragraph 29, the Court observed that the
rt
Land Acquisition Officer, the District Judge and the High
Court had failed to notice that the purpose of acquisition

was for Railways and that the purpose is a relevant factor
to be taken into consideration for fixing the compensation.

17. The Court in Nelson Fernandes relied on Viluben
Jhalejar Contractor Vs. State of Gujarat, where it was held

that:-

“29. ……the purpose for which the land is acquired,

must also be taken into consideration in fixing the
market value and the deduction of development

charges.”

Further, in paragraph 30, the Court specifically referred

to the deduction for the development charges and
observed:-

“30. We are not, however, oblivious of the fact that
normally 1/3rd deduction of further amount of
compensation has been directed in some cases.
However, the purpose for which the land is acquired
must also be taken into consideration. In the instant
case, the land was acquired for the construction of new
BG line for the Konkan Railways. …. In the instant case,

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acquisition is for laying a railway line. Therefore, the
question of development thereof would not arise.”

The Court made a reference to two other cases, viz.,
Hasanali Khanbhai & Sons Vs. State of Gujarat and
Land Acquisition Officer Vs. Nookala Rajamallu, where,
the deduction by way development charges, was held

.

permissible.

18. The situation is no different in the present case. All
that the acquiring body has to achieve is to widen the

National Highway. There is no further question of any
development. We again, even at the cost of repetition,
reiterate that no evidence was shown before us in support

of
of the plea of the proposed development. We, therefore,
hold that the High Court has erred in directing the
deduction on account of the developmental charges at the
rt
rate of Rs.25/- per square feet out of the ordered
compensation at the rate of Rs.75/- per square feet. We set

aside the judgment to that extent.”

18 The Hon’ble Supreme Court in various cases has

held that the land might be having high potentialities or

proximity to developed area, but that by itself would not be a

reason for not deducting developmental charges. However,

while determining deduction for development charges, the

Court should keep in mind the nature of land, area under

acquisition, whether the land is developed or not, if developed,

to what extent, the purpose of acquisition etc. The percentage of

deduction or the extent of area required to be set apart has to

be assessed by the Courts having regard to the size, shape,

situation, user etc. of the land acquired.

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19 Perusal of the case file reveals that in the present

case, Arbitrator has allowed 33% deduction in the market value

of the land determined by him. While dealing with said aspect

of the matter, the learned District Judge has come to the

.

conclusion that the cross-objections as preferred by the

claimant would not be maintainable coupled with the fact that

power of the Court to modify an award under Section 34 of the

Act of 1996 has been whittled down. He has observed that the

of
deduction should have been the same as has been made in

similar awards qua neighbouring revenue estate, namely,
rt
Behna Jatta, whereby the Arbitrator had made deduction to the

extent of 15% from the comparable sale deed being small in

size. However, for want of challenge by the land

owner/respondent, deduction of 33% was upheld by the

learned District Judge rightly.

20 At this stage, it has been urged and pointed out by

Mr. Yuyutsu Singh Thakur, Advocate, learned counsel for the

respondent that the petition under Section 34 of the Act of

1996 filed by the claimant/respondent is pending before the

learned District Judge.

21 If that be so, this question is left open to be

determined by the learned District Judge, who while dealing

with objections under Section 34 of the Act of 1996 as filed by

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the landowner/respondent shall independently deal with the

same without being prejudiced by the findings of this Court.

22 As regards last contention of Ms. Shreya Chauhan,

whereby she has submitted that award of interest @ 12% per

.

annum under Section 23(1-A) of the Land Acquisition Act by

the learned District Judge could not have been granted, the

Hon’ble Supreme Court in Union of India &Anr. Vs. Tarsem

Singh & Ors., 2019 (9) SCC 304 had declared Section 3J of

of
the Act of 1956 as unconstitutional. It was further held that the

provisions of Land Acquisition Act, 1894, relating to the
rt
assessment of solatium and interest as contained in Section

23(1-A) and 23(2) as well as the interest payable in terms of

proviso to Section 28 of the Act of 1956, would ipso facto apply

to the acquisition made under Act of 1956.

23 However, subsequently, the appellant-NHAI sought

a clarification in Miscellaneous Application Diary No.

2572/2020 in Civil Appeal No. 7086/2019, titled as National

Highway Authority of India & Anr. Vs. Tehal Singh & Ors.

decided on 30.07.2021 on the ground that benefit of Section

23(1-A) of the Land Acquisition Act had not been claimed before

any authority or the Court in the facts of those cases. The said

plea of appellant was accepted and vide order dated

30.07.2021, the decision in Tehal Singh & Ors. (supra) was

modified by deleting the expression ‘(1-A)’.

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24 While deciding miscellaneous application in Tarsem

Singh & Ors., the Hon’ble Apex Court dismissed SLP© Diary

No. 52538/2023, titled as Raj Kumar & Anr. Vs. Union of

India & Ors. Raj Kumar had arisen from a decision rendered

.

by the Punjab & Haryana High Court that was based upon LPA

No. 4965/2018, titled as National Highway Authority of

India Vs. Resham Singh decided a/w connected matters on

12.04.2023, whereby landowners’ claim for award of Additional

of
market value was declined. The Hon’ble Apex Court has held

that the challenge therein pertained to the High Court’s refusal
rt
to grant additional market value as another component of the

compensation, even though solatium and interest had already

been awarded. The relevant portion of the said decision reads

as under: –

“3. Additionally, SLP (C) Diary No. 52538/2023 titled ‘Raj
Kumar and another v. Union of India and others‘, has

been preferred by a private party whose lands were
acquired by NHAI. In this instance, the Punjab and

Haryana High Court has rejected their claim for the award
of ‘Additional Market Value’ relying upon its decision in

National Highway Authority of India v. Resham
Singh29whereby the landowners were held entitled to
‘solatium’ and ‘interest’, but their claim for the grant of
‘Additional Market Value’ was declined. These benefits
were granted / partly declined in terms of Sections 23(2)
and 28 of the Land Acquisition Act, 1894 (1894 Act),
which were read into the provisions of the National
Highways Act, 1956 (NHAI Act).

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25. In view of the foregoing analysis, we find no merit in
the contentions raised by the Applicant, NHAI. We reaffirm
the principles established in Tarsem Singh (supra)
regarding the beneficial nature of granting ‘solatium’ and
‘interest’ while emphasising the need to avoid creating

.

unjust classifications lacking intelligible differentia.

Consequently, we deem it appropriate to dismiss the
present Miscellaneous Application.

26. Leave is granted in the other connected matters, and

all the appeals are disposed of with a direction to the
Competent Authority to calculate the amount of ‘solatium’

of
and ‘interest’ in accordance with the directions issued in
Tarsem Singh (supra). In this context, the appeal arising
out of SLP (C) Diary No. 52538/2023 is dismissed, as the
rt
challenge therein pertains to the High Court’s refusal to
award Additional Market Value as another component of

the compensation, while ‘solatium’ and ‘interest’ have
already been granted.”

25 Similar reiteration of law can be found in a

judgment dated 8.10.2025, rendered by a coordinate Bench of

this Court in bunch of matters, lead being Arb. Appeal No.

135/2024, wherein all the submissions and contentions as

have been raised in the present appeal including deduction

towards developmental charges, small tract of land and market

value under section 23(1-A) of the Land Acquisition Act, have

been dealt with in detail.

26 In view of the categorical findings recorded by the

Hon’ble Supreme Court, the land owners are not entitled to

market value under Section 23(1-A) of the Land Acquisition Act.

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27 In the backdrop of the above discussion, award

passed by the Arbitrator cannot be said to be suffering from

perversity or illegality necessitating interference of the Court,

however judgment passed by the learned District Judge is set

.

aside to the extent it awards interest @ 12% per annum on the

enhanced amount of the market value of the land.

28. The appeal is party allowed in the aforesaid terms.

Pending application(s), if any, also stands disposed of.

of
(Romesh Verma)
01.04.2026 rt Judge
(pankaj)

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